The Federal Housing Finance Board is initiating a review of Federal Home Loan Banks' mortgage purchase programs to make sure they are not facilitating predatory lending.Finance Board Chairman Alicia Castaneda ordered the review in response to a speech by Sen. Paul Sarbanes, D-Md. The Maryland senator encouraged Fannie Mae and Freddie Mac to move further into the subprime market and encouraged the Federal Home Loan Banks to play a more active role in addressing predatory lending. "I have asked the Office of Supervision to look into that," she said, to make sure there are no predatory-lending issues related to FHLBank loans. Predatory lending is "an issue that is important to me," Ms. Castaneda said in an interview with MortgageWire.

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